City trader

12:01AM GMT 21 Jan 2006

Drug giant Shire Pharmaceuticals was the main blue-chip riser yesterday, climbing to a four-year high after settling a legal dispute with rival drugmaker Impax Laboratories.

The litigation related to Impax's attempt to market a generic version of Shire's Adderall XR treatment for attention deficit hyperactivity disorder. Dealers have speculated recently that a settlement could be on the cards, causing shares to rally, although yesterday they surged a further 49.5 to 884.5p.

Under the agreement, Impax will receive permission to sell generic forms of the drug in the US, and will pay royalties. Sales of Adderall in the US were $912m (£520m) for the year to November 30.

Shire is also holding talks with Barr Laboratories in connection with lawsuits over its attempts to produce a generic version of the same drug.

Credit Suisse First Boston said: "We now expect that Barr may sign a similar settlement in the near term."